The number of offshore financial centres could shrink by half within the next five years as the worldwide crackdown on tax havens gathers pace, according to a prominent Jersey-based financial lobbyist.<\/p>\n
Geoff Cook, chief executive of Jersey Finance, a promotional body representing the financial services industry on the Channel Island, said: \u201cIt is not inconceivable to think that the number of offshore finance centres could fall by half in the next few years.\u201d<\/p>\n
Cook was responding to a question on the future of offshore centres at a conference hosted by Jersey Finance in London last week. The Paris-based Organisation of for Economic Co-operation and Development lists 38 jurisdictions as tax havens.<\/p>\n
These include Jersey, the Cayman Islands and Liechtenstein, and less well-known and small jurisdictions such as the Caribbean islands of Aruba and Montserrat and Nauru in the Pacific.<\/p>\n
Cook and others reckon smaller offshore centres will feel pressure to meet increasingly tougher regulatory and disclosure rules from international organisations and governments demanding greater transparency.<\/p>\n
Tax havens are being forced to sign anti-secrecy agreements, or face possible sanctions from G20 countries. An estimated $7 trillion (\u20ac5.2 trillion) of assets are held offshore and, according to pressure group Tax Justice Network, developed countries lose $180bn a year in evaded taxes.
\nJay Krause, a partner at law firm Withers, said: \u201cThe next stage of development in international information sharing in tax matters will likely focus on establishing \u2018automatic\u2019 information exchange between jurisdictions.<\/p>\n
Such procedures may in practice be challenging for some of the smaller offshore centres to implement.\u201d Currently, Most offshore centres only disclose information on accounts when there is a specific request from another country that has signed a tax information exchange agreement with the tax haven.<\/p>\n
Krause added that smaller offshore centres will also struggle to attract the required talent to defend themselves against regulatory pressures.<\/p>\n